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Can someone please explain where the merchandise inventory (in the unadjusted trial balance) = 561,950 comes from? The question is stated below.

Can someone please explain where the merchandise inventory (in the unadjusted trial balance) = 561,950 comes from?

284 Chapter 5 Accounting for Merchandising Businesses Comprehensive Problem 2 B. Net profit: $ 762,500 inces for Palisade Creek Palisade Creek Co. is a merchandising business. The account balances Co, as of May 1, 2014 (unless otherwise indicated), are as follows: $ 83,600 233,900 602,400 16,800 11400 569,500 56,700 96,600 110 112 115 116 117 123 124 210 211 310 311 312 313 410 411 412 100,000 585,300 135,000 Cash Accounts Receivable Inventory Prepaid Insurance Store Supplies Store Equipment Accumulated Depreciation-Store Equipment Accounts Payable Salaries Payable Share Capital-Ordinary Retained Earnings Dividends Income Summary Sales Sales Returns and Allowances Sales Discounts Cost of Goods Sold Sales Salaries Expense Advertising Expense Depreciation Expense Store Supplies Expense Miscellaneous Selling Expense Office Salaries Expense Rent Expense Insurance Expense Miscellaneous Administrative Expense 5,221,100 92,700 59.400 2,823,000 664,800 281,000 e 520 521 522 523 529 530 531 532 539 12,600 382,100 83,700 7,800 During May, the last month of the fiscal year, the following transactions were completed: May i. Paid rent for May, $5,000. 3. Purchased merchandise on account from Martin Co., terms 2/10, n/30, FOB shipping point, $36,000. 4. Paid freight on purchase of May 3, $600. 6. old merchandise on account to Korman Co., terms 2/10, n/30, FOB shipping point, $68,500. The cost of goods sold was $41,000. 7. Received $22,300 cash from Halstad Co. on account, no discount. 10. Sold merchandise for cash, $54,000. The cost of goods sold was $32,000. 13. Paid for merchandise purchased on May 3, less discount. 14. Received merchandise returned on sale of May 6, $13,500. The cost of the merchandise returned was $8,000. 15. Paid advertising expense for last half of May, $11,000. 16. Received cash from sale of May 6, less return of May 14 and discount. 19. Purchased merchandise for cash, $18,700. 19. Paid $33,450 to Buttons Co, on account, no discount. 285 Chapter 5 Accounting for Merchandising Businesses Record the following transactions on Page 21 of the fournal May 20. Sold merchandise on account to Crescent Co., terms 1/10, n/30, PODS point, $110,000. The cost of goods sold was $70,000 21. For the convenience of Crescent Co., paid freight on sale of May 20, $2,300 21. Received 842,900 cash from Gee Co, on account, no discount. 21. Purchased merchandise on account from Osterman Co, terms 1/10, 1/30, POB destination, $88.000. 24. Returned $5,000 of damaged merchandise purchased on May 21, receiving area from the seller 26. Refunded cash on sales made for cash, $7.500. The cost of the merchandise returned was $4,800. 28. Paid sales salaries of $56,000 and office salaries of $29,000. 29. Purchased store supplies for cash, $2,400. 30. Sold merchandise on account to Turner Co., terms 2/10, n/30, FOB shipping point, $78,750. The cost of goods sold was $47,000. 30. Received cash from sale of May 20, less discount, plus freight paid on May 21. 31. Paid for purchase of May 21, less return of May 24 and discount. Instructions 1. Enter the bal e nel of the counts in the painte balme colmo for colum n . Weite Balance the tem section wel ple doekmack in the Dasting Reference . Journalize the transactions for July, Starting on Page 20 of the Journal 2. Post the journal to the general ledger, extending the month-end balances to the appropriate balance columns after all posting is completed. In this problem, you are not required to update or post to the accounts receivable and accounts payable subsidiary lodgers. 3. Prepare an unadjusted trial balance. 4. At the end of May, the following adjustment data were assembled. Analyze and use these data to complete (5) and (6). a. Inventory on May 31 b. Insurance expired during the year c. Store supplies on hand on May 31 d. Depreciation for the current year e. Accrued salaries on May 31: Sales salaries Office salaries $550,000 12,000 4,000 14,000 $7,000 6,600 13,600 Optional liver the wysied wat walancom 10.com -end of period spread. sheet (worksheet), and complete threadsheet. 6. Journalize and post the adjusting entries. Record the adjusting c ocon Doge 20 of the journal 7. Prepare an adjusted trial balance. 8. Prepare a statement of comprehensive income, a retained earnings statement, and a statement of financial position. 9. Prepare and post the closing entries. Record the closmy ChrerICS On Page 2 of the journal ladicate closed accounts incerting a line in both the Palace columns opposite the closing entry Insert the new balance in the recamcd carmings account. 10. Prepare a post-closing trial balance. Post Rol. Dett Credit Date 2014 May 5000 1 Rent Expense Cash 531 110 5000 36.000 3 Merchandise Inventory Accounts Payable Martin Co. 115 210 J6000 COO 4 Merchandise Inventory Cash 115 110 112 68,500 6 Accounts Receivable-korman Co. Sales 41.000 6 Cost of Merchandise Sold Merchandise Invertory 510 115 41,000 110 22 200 7 Cash Accounts Receivable-Halstad Co. 112 22 200 54.000 10 Cash Sales 110 410 5-6000 32000 10 Cost of Merchandise Sold Merchandise Inventory 510 115 32.000 36,000 13 Accounts Payable Martin Co. Casti Merchandise Inventory 210 110 115 35 280 720 1500 14 Sales Retums and Allowances Accounts Receivable-kormal Co. 411 112 13,500 8 000 14 Merchandise inventory Cost of Merchandise Sold 115 510 8,000 11.000 15 Advertising Expense Cash 521 110 11,000 1161Cash Sales Discounts Accounts Receivable-korman Co. 110 412 112 53900 1. 100 55,000 1&700 19 Merchandise Inventory Cash 115 110 1&700 210 11450 19 Accounts Payable Buttons Co. Cash 1 10 33,450 Post. Re. Date Debit Credit 2014 May 110.000 20 Accounts Receivable-Crescent Co. Sales 110,000 5 10 70.000 20 Cost of Merchandise Sold Merchandise Inventory 70.000 112 2.300 21 Accounts Receivable-Crescent Co. Casti 2.300 110 42.900 21 Cash Accounts Receivable-Gee Co. 112 12.900 88,000 21 Merciandise Inventory Accounts Payable-Osterman Co. 115 210 100.000 210 5,000 24 Accounts Payable-Osterman Co. Merchandise Inventory 5,000 7,500 26 Sales Returns and Allowances Casti 500 115 4.800 26 Merchandise Inventory Cost of Merchandise Sold 800 28 Sales Salaries Expense Office Salaries Expense Casti 56,000 20.000 85.000 29 Store Supplies Cash 110 400 30 Accounts Receivable-Turner Co. Sales 78.750 78.750 47.000 30 Cost of Merchandise Sold Merchandise Inventory 47.000 1 10 30 Cash Sales Discounts Accounts Receivable-Crescent Co. 111,200 1.100 412 112 112.300 83.000 31 Accounts Payable-Osterman Co. Cash Merchandise liiventory 210 110 115 82,170 PALISADE CREEK CO. Unadjusted Trial Balance May 31, 2014 Credit Bwances Debit Balances 84,500 247.450 561.950 16,800 13,800 569,500 56.700 63,150 100,000 585,300 135.000 Cash Accounts Receivable Merchandise Inventory Prepaid Insurance Store Supplies Store Equipment Accumulated Depreciation-Store Equipment Accounts Payable Salaries Payable Capital Stock Retained Earnings Dividends Sales Sales Returns and Allowances Sales Discounts Cost of Merchandise Sold Sales Salaries Expense Advertising Expense Depreciation Expense Store Supplies Expense Miscellaneous Selling Expense Office Salaries Expense Rent Expense Insurance Expense Miscellaneous Administrative Expense 5,532,350 113,700 61.600 3,000,200 720.800 292,000 12,600 411,100 88.700 7,800 6,337,500 6,337,500